With the federal estate tax exemption so large, you may not be worried about estate taxes anymore. But it’s a good time to focus on saving income taxes for your heirs.
If you’ve inherited assets or you’re planning your estate, it’s crucial to understand the fair market value basis rules (also known as the “step-up and step-down” rules). That way, you won’t pay more tax than you’re legally required to.
The 663(b) election, also known as the “65 Day Rule” enables a trust to make a distribution within the first 65 days of year, and have it count as a distribution for the previous tax year. While this has always been a planning tool used to maximize tax savings for trusts and beneficiaries, it takes[ … ]
A tried-and-true estate planning strategy is to make tax-free gifts to loved ones during life, because it reduces potential estate tax at death. There are many ways to make tax-free gifts, but one of the simplest is to take advantage of the annual gift tax exclusion with direct gifts. Even in a potentially changing estate[ … ]
[inlinetweet]Giving away assets during your life will help reduce the size of your taxable estate[/inlinetweet], which is beneficial if you have a large estate that could be subject to estate taxes. For 2016, the lifetime gift and estate tax exemption is $5.45 million (twice that for married couples with proper estate planning strategies in place).[ … ]
Note: The deadline in 2017 is March 6th. (More) The 663(b) election, also known as the “65 Day Rule” enables a trust to make a distribution within the first 65 days of the year, and have it count as a distribution for the previous tax year. While this has always been a planning tool used[ … ]
Recently, the IRS released the 2016 annually adjusted amount for the unified gift and estate tax exemption and the generation-skipping transfer (GST) tax exemption: $5.45 million (up from $5.43 million in 2015). But even with the rising exemptions, annual exclusion gifts offer a valuable tax-saving opportunity. The 2015 gift tax annual exclusion allows you to[ … ]
Here’s a simplified way to project your estate tax exposure. Take the value of your estate, net of any debts. Also subtract any assets that will pass to charity on your death. Then, if you’re married and your spouse is a U.S. citizen, subtract any assets you’ll pass to him or her. Those assets qualify[ … ]
Why you still need a credit shelter trust Even though portability now allows married couples to use up both spouses’ estate tax exemptions without having to make lifetime asset transfers or set up trusts, this “easier” path isn’t necessarily the better path. For couples with large estates, making lifetime asset transfers and setting up trusts[ … ]
An annual estate plan checkup is critical to the health of your estate plan. Because various exclusion, exemption and deduction amounts are adjusted for inflation, they can change from year to year, impacting your plan: 2014 2015 Lifetime gift and estate tax exemption $5.34 million $5.43 million Generation-skipping transfer tax exemption $5.34 million $5.43 million[ … ]